WHAT’S NEXT FOR MLR: AT HHS— NAIC will send the regulation to HHS early next week and Secretary Sebelius says she plans to “work quickly to promulgate this regulation, using the NAIC recommendations as a basis, because we believe these new policies will help ensure not only cost savings but higher quality care for consumers.”

STICK A FORK IN IT?— Sebelius’s statement praises the regulation, signaling that HHS may not change much in the policy. “These recommendations are reasonable, achievable for insurers and will help to ensure insurance premiums are, for the most part, supporting health benefits for consumers. Not only do they ensure consumers receive better value for their health care dollar, they recognize special circumstances in different markets to preserve market stability and employee coverage as we transition to the new marketplace in 2014.”

Good Friday morning. We’re back from Orlando and enjoyed meeting many PULSE readers at the NAIC convention! “In the jungle, the mighty jungle, the Pulse sleeps tonight.”

LYRIC CONTEST – Congrats to Avalere Health’s Audrey Horn who was the first PULSE reader to guess our lyric theme for the week: sleep! Which we’re guessing any NAIC attendees this week are in dire need of, your PULSE team included.

THE MLR REG PASSES— a.k.a. a birthday present from the NAIC to Commissioner Praeger?

MORE ON THURSDAY’S VOTE (WONK VERSION)— The NAIC voted unanimously to approve the regulation after dealing with a handful of controversial issues. The three amendments we told you about yesterday – aggregation, credibility and agents’ commissions – all came up, but commissioners only voted on credibility. (It failed 19-34, with one abstention from Texas). The other two were introduced but quickly withdrawn. Commissioners seemed pleased with the compromise that they’d form a subgroup to work with HHS on agent commissions.

MLR ISN’T COMPLETELY GOING AWAY— Kansas Insurance Commissioner Sandy Preager, who led the MLR talks, warned Thursday that even the commissioners are in unchartered territory on some parts of the regulation and that they’ll likely be going back to HHS next year with revisions. “I know we’re struggling with a lot of unknowns. There’s an unknown at 50 percent,” she said during the session, in reference to the credibility interval adjustments. “There’s an unknown at 80 percent.”

THE NEXT ISSUE: IT’S JUST A PHASE— How the medical loss ratio actually affects insurers still largely hinges on how generous HHS is with granting waivers that could let states implement the new spending requirements gradually. NAIC President Jane Cline told reporters after the vote that commissioners “are watching very closely” for market disruption and “prepared to submit waiver requests.” Commissioners previously urged HHS to “give deference to the analysis and recommendations of state regulators when determining how the new requirements will be phased-in.” Three states have already requested MLR waivers.

…OR IS IT? Citigroup’s Carl McDonald writes in an early Thursday a.m. note to investors that the market has underestimated the impact MLR will have: “Unless plans are successful in obtaining the federal income tax adjustment and receive numerous waivers from HHS ... plans will be forced to pay bigger rebates next year than the market currently anticipates, which means the consensus earnings outlook for next year seems too high.” Full report http://bit.ly/ayEYok

NEXT YEAR’S NAIC— Up to 30 of the 56 commissioner slots could turn over next year because of gubernatorial or commissioner elections, or retirements, some PULSE sources predict. Such a substantial shift hasn’t happened since 1994. Cline says there is institutional knowledge in place at the NAIC and in state insurance officers to ensure there is a smooth transition. “We are able to respond to new commissioners and their staffs to get up to speed on the various issues we’re dealing with – and we are dealing with many issues,” Cline said.

DOCS STEP UP SGR CAMPAIGN— Osteopathic physicians are urging lawmakers to stop the Medicare payment cuts due to go into effect Dec. 1. They’re asking for “the most meaningful and long term reforms to the sustainable growth rate formula politically attainable,” in a letter to lawmakers. They say that anything less than a yearlong fix would further harm Medicare. The letter http://politi.co/d66eH8

** A message from AdvaMed: Medical technology is one of America's most successful home-grown industries, supporting over 2 million good paying jobs in small towns and large communities across the country. www.lifechanginginnovation.org **

PHONE-A-FRIEND – Health Care for America Now started Thursday a 10-state phone campaign in districts that Sixty Plus Association, Chamber of Commerce, Crossroads GPS and American Action Network have blanketed with millions in anti-reform ads. The HCAN telephone campaign delivers pre-recorded messages warning that the television ads are “filled with falsehoods.” They’re aiming to reach a half million seniors.

CANCER CONUNDRUM – The National Comprehensive Cancer Network this week quietly affirmed its recommendation that Avastin be used to treat metastatic breast cancer, a decision that flies in the face of an FDA committee’s recommendation this summer to revoke the drug’s approval for such treatments. Since Medicare uses the NCCN Compendium as a mandated reference for oncology coverage policy, the competing recommendations no doubt put the agency in an uncomfortable spot. NCCN Announcement http://bit.ly/aUvL2r

WHAT WE’RE READING:

The Republican candidate for attorney general in South Carolina is promising that the state will be a leader in fighting the health reform law. http://bit.ly/cMaFnc

Brookings’ Engelberg Center for Health Care Reform releases a new report on how to bend the cost curve. http://bit.ly/cgE1bR

DeFund It is delivering letters to lawmakers asking them to de-fund the health law, and Washington Examiner’s David Freddoso questions if it will lead to a government shutdown. http://bit.ly/cBBhHc

Tea party supporter and wife of Supreme Court justice Clarence Thomas, Ginny Thomas removes her name from a memo opposing health reform. http://bit.ly/dpC5uY

THE SCORES from Chris Frates
The fightin' Phils stay alive beating San Fran 4-2 and take the series back to Philly for Game 6 on Saturday. They trail the Giants three games to two.

Yanks and Rangers play tonight at 8:07 p.m. in Arlington, Texas. Rangers lead 3-2.

** A message from AdvaMed: A leading exporter of life changing innovation, America’s medical technology companies contribute over $160 billion to the U.S. economy. Medical technology companies support more than 2 million good paying jobs in communities across the country—with salaries 40% higher than the national average. Create better patient outcomes, good paying jobs and a healthier economy. Support life changing innovation through policies that encourage continued medical progress and patient access to quality care. www.lifechanginginnovation.org **